The scope of interference with the Arbitral Award under Section 37 is narrower and more limited than under Section 34.

JUDGMENT

Rajiv Sahai Endlaw, J. - CM No.8193/2021 (for exemption)

1. Allowed, subject to just exceptions and as per extant rules.

2. The application is disposed of.

FAO(OS) (COMM) No.36/2021

3. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 impugns the JUDGMENT dated 15th December, 2020 of the Commercial Division of this Court of dismissal of application of the appellant under Section 34 of the said Act.

4. The application under Section 34 of the Act, being OMP(COMM) No.566/2020, was filed with respect to arbitral award dated 21st December, 2019 (of three Arbitrators, with the appellant and the respondent having nominated one Arbitrator each and the third Arbitrator having been appointed by this Court) of dismissal, in exercise of powers under Section 16 of the Act, of all the claims of the appellant.

5. It is the contention of the counsel for the appellant that the Arbitral Tribunal, on an application under Section 16 of the Act having been preferred by the respondent, has summarily dismissed all the 15 monetary claims for recovery of compensation/damages, of the appellant against the respondent, with respect to the Contract for 'Construction of Road Over Bridges (ROBs) & its approaches as per Specifications, Drawing & Design, Maintaining all Quality Control Standards etc. complete under ROB Cluster Package in Lieu of various LCs at Jaipur' entered into by the respondent with the appellant.

6. The counsel for the appellant has drawn our attention to Clause 49.5 of the General Conditions of Contract, invoking which the application under Section 16 of the Act was filed by the respondent. As per the said clause, in the event of any failure or delay on the part of the respondent or the engineer in fulfilling their obligations under the contract, such failure or delay on the part of the respondent or the engineer was not to in any way affect or vitiate the contract or alter the character thereof or entitle the appellant to damages or compensation therefor except that the engineer shall grant such extension or extensions of time to complete the work as in his opinion was reasonable. It was the plea of the respondent in its application under Section 16 of the Act, that all the 15 monetary claims of the appellant were barred and/or not maintainable under Clause 49.5 of the General Conditions of Contract.

7. The counsel for the appellant has contended that the Arbitral Tribunal ought to have granted the appellant an opportunity to prove that the claims of the appellant were not barred by Clause 49.5 of the General Conditions of Contract. Attention is drawn to Clause 49.4 of the General Conditions of Contract which deals with delays not due to employer/contractor but on the part of the third parties or on the part of the Court orders. The contention of the counsel for the appellant is that all the 15 claims of the petitioner fall under Clause 49.4. On further enquiry, as to under which clause of Section 34 of the Arbitration Act the appellant justifies setting aside of the award, it is contended that the claim of the appellant falls under Section 34(b)(ii), whereunder an arbitral award is liable to be set aside if is in conflict with the public policy of India. It is argued that opportunity to lead evidence is the public policy of India and summary dismissal of claims under Section 16, as barred by Clause 49.5, is in denial of principles of natural justice.

8. Though according to us there is no absolute component of the principles of natural justice, that an opportunity to lead evidence will be granted, if it is otherwise evident from the pleadings and the documents that the claim is barred, and the Arbitral Tribunal is not bound by the procedure prescribed in the Code of Civil Procedure, 1908 (CPC) or the Indian Evidence Act, 1872 but we have proceeded to hear the counsels. Reference in this regard may be made to Municipal Corporation of Delhi vs Jagannath Ashok Kumar, (1987) 4 SCC 497, Sohan Lal Gupta vs Asha Devi